New College Grads and Whole Life

Life insurance is something few people begin to think about until they have children. However, as a new college graduate, you may be in the best position to purchase a policy from the main types of whole life insurance. The reason is that whole life insurance is never ending. You are covered for life, even if you get very sick. If you are at the peak of your physical health, it is a good time to start to compare policies online by getting free quotes. Your rates are going to be much lower than an older person who may have some disabilities.

Premium Factors

Life insurance companies charge premiums, or periodic payments, based on a few different factors. One of those factors is age. They predict that younger people are generally healthy and will live a long life. Longevity is very important to a life insurance company. Another factor they take into account is your gender and health. Your premiums are based on a combination of several factors, but age and health are in your favor at this point in your life.

Benefits of Whole Life

For a young college graduate who is married with a child or two, your main concern should be the welfare of your spouse and children. If they rely on your income for their financial stability, it is imperative that you purchase a life insurance plan. It can provide much-needed funds in difficult times. You can name your beneficiaries as your spouse and children to make sure they get the money they deserve.

Another benefit of a whole life policy is the cash value, which you can use for your family's benefit. After you have built up some equity in the account, you can either withdraw the money for emergencies or borrow against the value. Take out loans for graduate school or buy a new home. Pay for your child's daycare costs. Whatever you need, the cash value can secure it.

Types of Whole Life

There are several variations of a permanent life insurance plan. You might choose to pay your premium in one lump sum, called a "Single Premium" plan. Alternatively, you could pay the premiums for only 10 or 20 years. You could participate in your insurance company's dividend plan or not.

Life insurance dividends are dispersed each year to policyholders with a participating plan. You could use the dividends in several ways. Choose to take the dividends in cash, add it to your cash value, or reduce your premium amount. If you use it pay down your premium, over time, you may not have to pay anything because the account will have been completely paid off.

Modified Whole Life Plans

Modified whole life insurance plans are specially designed for younger people. It charges policyholders a low premium for about 5 years, after which the rates go up. The rates are low so that you will not be burdened with the cost of paying your life insurance in addition to a new mortgage, student loans and daycare costs. A modified plan might also have a limited payment policy, where you would only pay the premium for a set number of years. If you have the money, you could also do a single premium plan. Every company has a different set of rules for new college grads and whole life, so check with different agents about customizing your policy.

The best time to purchase lifetime insurance is when you are young and healthy. You can lock in rates now and not have to worry later about qualifying for insurance as a senior citizen. Start getting your free quotes today and find out what you can afford.